Decathlon to make life difficult for Estonian sporting goods stores

Sale being advertised at a shopping mall in Tallinn. Photo is illustrative.
Sale being advertised at a shopping mall in Tallinn. Photo is illustrative. Source: Anna Aurelia Minev/ERR

Sporting goods stores in Estonia are in for competition from market newcomer Decathlon, set to open its first Estonian store on Thursday.

Decathlon will open its first store in Estonia at the brand new Kurna Shopping Park right next to IKEA Estonia near Tallinn on Thursday. Local sporting goods store owners believe this will have considerable effect on the market.

Tarmo Mere, manager of the Matkasport chain of hiking goods stores, told ERR that the sporting and outdoor goods market has been growing rapidly in recent years and really headed up during the Covid period. There are many chains on the market, while they have somewhat different shopper bases.

Mere said that Matkasport is concentrating primarily on durable and high-quality hiking gear. The chain prefers brands that are committed to sustainability or have declared themselves climate neutral.

"Decathlon is well-known as Europe's largest sporting goods chain, its sprawling stores well-stocked with private label products available at favorable prices. Decathlon's advantage lies in its vertical market presence, from manufacturing to stores. It is all one company and private label goods are a good way to optimize. Competition will grow more fierce, that much is clear," Mere admitted.

The manager said he is excited to see how the new shop's first weekend and months in Estonia will affect the market.

Alo Maidla, executive manager of Hawaii Express, admitted that competition is already quite fierce, also because there are several online shops competing with more traditional traders. He said that Decathlon's market entry is less of a concern for Hawaii Express as the company mostly sells bicycles and skiing equipment.

"Decathlon will up competition on the bike market to some extent, while its effect will be far greater regarding clothing, footwear, recreational and outdoor goods," Maidla said.

Decathlon's market effect comparable to Lidl's

The Hawaii Express manager added that Decathlon arriving in Estonia will alter the local sporting goods market similarly to how IKEA disrupted the furniture and Lidl the retail markets.

"Good for the shoppers, more difficult for traders," Maidla remarked.

Sven Rebane, owner of Veloplus that mostly sells bicycles, spare parts and equipment, also compared Decathlon's arrival to the advent of Lidl. He said that it is sure to impact existing companies' market share, mostly in the cheaper segment.

Rebane added that someone who is training for a marathon will want to pay more than a few hundred euros for a bicycle.

"There are bicycles and then there are bicycles," Rebane said, adding that people shopping for a €3,000 bike will not go to Decathlon. "They can be completely different things, just as it is with cars," Rebane said. "This is not to say that Decathlon carries trash as we've seen their success elsewhere. While it will have an effect, it will mostly be felt in its segment."

The head of Matkasport agreed, suggesting that Decathlon's arrival is important for price sensitive customers as it is bound to lower the general price level.

Tarmo Mere said that there will be market reorganization and an effect on turnovers, while he believes the number of people looking to maintain an active lifestyle will continue growing, and having a wider selection of goods is bound to benefit the consumer.

Estonia's leading sporting goods chains Sportland and Rademar did not wish to comment.

Rademar made €1.48 million at a turnover of €33.9 million last year, up from a profit of €531,000 the year before. Because the company changed its fiscal year to run from April 1 to March 31, the period in question covers 15 months.

Sportland Eesti, part of Sportland International Group AS, is made up of Sportland Outlet, Timberland, Adidas and SportsDirect stores and the Sportland online shop.

Its fiscal year started on May 1, 2021, and ended April 30 last year during which it generated turnover of €54 million. The group's profit was €6.2 million.

Matkasport managed to increase its turnover by around 25 percent between October 1, 2021, and the end of September last year. It came to €7.2 million and profit to €407,000.

Veloplus OÜ clocked a turnover of €4.5 million, down 7 percent on year. Net profit came to €582,000.

Hawaii Express' turnover was €14.3 million and it made a profit of a little more than €1 million last fiscal year.

Decathlon sports goods outdoor advertisement. Source: Andrew Whyte/ERR News


Follow ERR News on Facebook and Twitter and never miss an update!

Editor: Marcus Turovski

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: